FAA Clarifies Noncitizen Trust Policy

The FAA issued a 42-page “policy clarification” regarding the registration of aircraft to U.S. citizen trustees in situations involving non-U.S. citizen trustors and beneficiaries. Citing concerns that noncitizen trusts (NCTs) jeopardized its oversight authority over N-registered aircraft, the agency issued a moratorium on the use of NCTs in May 2010.

That ban was subsequently relaxed following outcry from aviation groups. According to NBAA, both sides then engaged in discussions to craft language that preserves the use of NCTs while also addressing the agency’s concerns.

“The policy clarification requires that the trustee maintain current information about the identity of the operator of its aircraft, the address of the operator, the location of the aircraft records, the base of operations and the nature of its operations,” law firm Wiley Rein said in its analysis of the clarified policy. “As a guideline…the owner-trustee should be able to provide the FAA with this information within two business days. The FAA expects that the owner-trustee be able to provide more details, including specific information on aircraft operations, crew, maintenance and other records and its airworthiness status, within five business days.”

“While not perfect, this clarification is largely what our industry had expected, based on earlier discussions between the FAA and the industry working group,” said NBAA vice president for operational excellence and professional development Mike Nichols.